Marvin Traylor, of Illinois Association of Aggregate Producers (IAAP), knows the battle is lost this year, but says the Association – and others – will return to fight another day against millions of dollars of diversions in next year’s budget.
“The budget’s a one-time thing,” Traylor shrugs. “It’s over for now … but there’ll be another one next year.”
In the face of widespread resistance, the Illinois General Assembly recently approved Governor Rod Blagoevich’s fiscal year 2004 budget —including $335 million diverted from the Illinois highway fund to pay for other state government programs, state police, the Secretary of State, and for a $50-million General Revenue fund.
Not only did the IAAP battle against the tax diversion, but the Association also fought Gov. Blagoevich’s notion that the road fund is a special interest fund, and therefore subject to a new recurring 5 percent service charge.
Traylor said, “You can’t have an economy in Illinois without roads. The road fund simply is not a special fund.”
State of the State
Inheriting a crippled economy and budget shortfalls when he took office in January, Gov. Blagoevich proposed a $52-billion spending and revenue plan that borrows heavily from surpluses designated for state highway programs, despite statutory limits.
It’s an increasingly common phenomenon in states struggling to pay for education, to fight crime and to maintain government necessities, American Association of State and Highway Transportation Officials spokeswoman Jennifer Gavin told Primedia reporters. “States are experiencing the most severe budget deficit they have experienced in the past 15 years,” she estimated. “It’s brutal out there.”
Maryland has already slashed budgets and diverted funds, but some states, like Oregon, have constitutionally protected highway funds. Oregon has $2 billion to spend specifically on roads and bridges in 2004. It’s a situation Traylor says the IAAP had hoped Gov. Blagoevich might respect.
As IAAP has pointed out, roads and bridges in Illinois are paid for entirely through three types of user fees: state motor fuel tax, state motor vehicle registration fees, and federal motor fuel tax. One of the achievements of TEA-21 was the implementation of provisions to ensure that all Highway Trust Fund revenue is used for highway and transit purposes.
Although only the federal funds are legally safeguarded for expenditure exclusively on road and bridge projects, IAAP believes all funds should be reserved for such usage.
The Governor’s Way
Illinois’ new budget allows for $400 million more in education spending (including a $250 per-student increase), $30 million more for early childhood education, and almost $100 million for school programs mandated by state law (including special ed and transportation), a $50-million “rainy day fund” for protection in the face of economic downturn, $24 million to reopen Sheridan Correctional Center, $23 million to expand FamilyCare eligibility to 65,000 working parents, and $4 million to expand KidCare eligibility to 20,000 more children.
Rather than increase taxes or expand gambling, Gov. Blagoevich mixed budget cuts, personnel cuts, an innovative pension financing plan (cost savings: $1.9 billion), new, recurring revenue ($1.3 billion), and one-time revenue sources ($800 million).
On paper, the budget is balanced. But not everyone approves of the plan. Chicago Tribune writers rail against the idea of doubling the state’s long-term debt by borrowing against public employee pensions, while failing to close loopholes that rebate millions of dollars to chain retailers.
In a prepared statement, the governor (who declined to be interviewed for this article, suggesting that all his opinions on the subject are a matter of public record) said of his plan: “By being disciplined, doing things differently, and making the tough choices, we have found a way to not only balance this budget, but to invest our money where it matters: in education, in healthcare and in public safety.”
But apparently not in road construction. Traylor says the IAAP met with the Governor and his staff in an attempt to dissuade him from siphoning off funds earmarked for state and local highway programs, but their pleas fell on deaf ears.
What’s Covered
Citing the need to balance financial difficulty with economic realities, Gov. Blagoevich’s $3.8 billion budget for the Illinois Department of Transportation (IDOT) is about $700 less than last year’s.
IDOT’s total 2004 budget will be nearly $7.7 billion, which includes $3.9 billion in reappropriations to pay for transportation improvements already underway.
Other expenditures allotted for 2004 included $533.3 million to assist public transportation in northeast Illinois and downstate communities purchase buses; $98.8 million for airport improvements (including $5 million for land acquisition for the south suburban Chicago airport); $41.8 million for rail improvements (including $25 million for high-speed rail between Chicago and St. Louis); $8.2 million for traffic safety to continue anti-drunk driving projects and to boost seat belt usage; and $1.7 billion for constructing, reconstructing and repairing highways and bridges – or $600 million less than the last three budgets allotted.
State of the Highways
IDOT, which is responsible for the planning, design, construction, operation and maintenance of the 17,000-mi. state highway system, and administers the local roads and streets programs, has concerns about the aging – yet increasingly traveled – interstate system, and fears budget cuts will be detrimental to its programs.
In identifying reconstruction and capacity needs through the year 2017 that would require $17.5 billion, IDOT restates current statistics to impress upon the legislature how far funds must stretch.
• More than 288,000 lane miles of public highway in Illinois carry a total of 102 million vehicles annually.
• Illinois ranks third in total highway centerline miles, third in total lane miles, seventh in vehicle miles of travel, and fifth in total population – but only eighth in highway funding.
• Illinois has the second-largest public transit system in the country, as well as the second-largest air transportation.
• One out of five jobs in Illinois is related to transportation.
“Preserving the condition and performance of the Interstate highway system, as well as bridges, is a key priority in Illinois,” stated an IDOT spokesperson. “The Discretionary Interstate Maintenance and Discretionary Bridge programs are essential to address the extraordinarily high-cost projects that require exceptionally large levels of funding over short periods of time. Such projects cannot be practically accommodated within a state’s regular formula apportionment.”
Unfortunately, the need exceeds Gov. Blagoevich’s proposed budget. Traylor said the governor promised to help in the attempt to secure more federal funds to replace reduced state funds.
Robbing from Peter
Federal funding was once a boon to the Illinois road fund, in a roundabout way. TEA-21 provided an historic increase in federal surface transportation funding, increasing highway funding by 44 percent. Illinois, however, ranked the third lowest in the nation, receiving only a 29-percent increase in funding. In response, then-governor Ryan and the Illinois General Assembly created Illinois Funding for Infrastructure, Roads, Schools and Transit, commonly referred to as FIRST.
Under the five-year, $12- billion infrastructure funding program, the state increased funding for its highway program by more than $3.7 billion, and added $2.1 billion in funding for its transit program.
Overall, Illinois FIRST added more than $8 billion in transportation-related infrastructure improvements, including: repair and rehabilitation of 1,500 bridges; resurface of 4,415 mi. of roadway; rehabilitation of 795 mi. of Interstate; reconstruction of two rapid transit lines in Chicago; and extension and modernization of three commuter rail lines in suburban Chicago.
It also helped leverage limited federal funding and fill in gaps. Traylor said the DoT budget “went from $1.2 million to $2.1 billion per year, but now, with Illinois FIRST ending and the bond component of the governor’s new budget, it puts us back at $1.3 million.”
IAAP contends that Gov. Blagoevich’s new budget diverts funds over and above those contained in FIRST legislation
Ultimately, according to Traylor, it will effectively decrease the amount spend on roads. “This summer is set,” he said. “But it’s going to start affecting us next year. You’ll see less road work, which means less employment as jobs are cut.”
He has estimated a loss of more than 11,000 construction jobs. And Traylor is fearful beyond just the next fiscal year. “There’s no reason to believe that service charge won’t continue. Unless someone gets it taken off.”
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